Plans are taking shape in industrial zones around Addis Ababa and the northern city of Mekelle, where Ethiopian firms and Chinese partners will set car assembly plants.

By Aaron Maasho (Reuters) |

Addis Ababa―Ethiopia has grand ambitions for its tiny auto industry, seeking to transform a handful of assemblers that bolt together imported kits into a network of factories that can make the country Africa’s biggest car manufacturer over the next two decades.

It is part of a vision to turn a nation that is among the poorest in Africa into an industrial center that no longer relies on fickle weather patterns that periodically devastate the agrarian economy and leave its people hungry.

Plans are taking shape in industrial zones around Addis Ababa and the northern city of Mekelle, where Ethiopian firms and Chinese partners assemble the vehicle kits.

Ethiopia produces about 8,000 commercial and other vehicles a year for the home market, about a quarter of which are cars. But executives say they have capacity to make more if they could obtain extra foreign exchange to import kits in greater numbers. The nation imported more than 38,000 assembled cars in 2015, a more than 50 percent increase on 2014.

“There is a lot of potential for growth,” said Ma Qun, deputy manager of China’s cauto group in Ethiopia, which has the capacity to assemble 5,000 cars a year but whose output is less than a fifth of that. “We want to start exporting from Ethiopia by 2018, or a year later,” he said.

For now, Ethiopia is a minnow in African terms. South Africa and Morocco are involved in the full manufacture of vehicles annually making more than 600,000 and 200,000, respectively. Egypt, Sudan and Kenya also assemble vehicles.

The scale of the challenge is formidable. South Africa boasts a big domestic market to drive the industry with annual per capita income of $6,800 compared to Ethiopia’s meager $550, according to World Bank data for 2014. Morocco, with annual per capita income of about $3,070, lies only a short distance across the water from the huge European market.

Continue reading story on Reuters
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